PwC: African capital markets indicate recovery in 2017

Equity capital market (ECM) activity in 2017 was the second highest since 2013 in terms of volume with 121 issuances, up 25 per cent over the prior year, and the highest since 2013 in terms of value, said PwC in a release.

Overall, African equity capital market transaction volume and value improved in 2017 over 2016. In terms of value, 2017 saw the largest initial public offerings (IPOs) over the trailing five-year period, and an increase in the total value of equity capital market (ECM) transactions of 49% between 2016 and 2017 in US dollar terms.

PwC released its 2017 African Capital Markets Watch publication, which analyses equity, and debt capital market transactions that took place between 2013 and 2017 on exchanges throughout Africa, as well as transactions by African companies on international exchanges. This report lists all new primary market equity initial public offerings (IPOs) and further offers (FOs) by listed companies, in which capital was raised on Africa’s principal stock markets and market segments. The report also includes IPO and FO activity of African companies on international exchanges or non-African companies on African exchanges, on an annual basis.

Andrew Del Boccio, PwC Capital Markets Partner notes, “Capital markets in Africa saw a recovery in 2017 with the positive impact of commodity stabilisation on economies such as Cote d’Ivoire and Nigeria, which emerged from five successive quarters of GDP declines, and resilience in the face of economic and political uncertainty in South Africa.”

Since 2013, there have been 519 African ECM transactions raising a total of $52.7 billion, up 17 per cent in terms of capital raised over the previous five-year period. Overall, ECM activity in 2017 was the second highest since 2013 in terms of volume with 121 issuances, up 25 per cent over the prior year, and the highest since 2013 in terms of value, driven mainly by a few significant IPOs and FOs during the year.

“We are optimistic about the pipeline of companies seeking to access the capital markets in 2018, including cross-border IPOs of African companies, given encouraging indicators in large markets such as South Africa, Egypt, and Nigeria, and the continued economic growth in East Africa and the Francophone West African countries,” Del Boccio comments.